LP Rewards on Mainnet

Ideas
1

Spoiler: I’ve shared most of these ideas in another thread before.

The Problem
Our DEX liquidity on Ethereum is basically non-existant. Uniswap liquidity recently dropped below $100k… that’s absolutely insane for a project with a market cap in the tens of millions. Even swapping small amounts (<1 ETH) can have a noticeable price impact.

More in-depth explanation for patient people

I get that everything is happening on Polygon and it makes sense to incentivize migrating from Ethereum, but I feel like we really need some incentives for liquidity on mainnet. It’s also not a very attractive investment for larger players, since they can’t buy without doing KYC or moving the market on Uniswap.

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With $100k liquidity on Uniswap you couldn’t even buy something like 10k GHST without immediately losing over 13% to slippage. This means that there is currently no way to buy GHST without doing KYC or bridging your assets to a completely new ecosystem (Polygon) - that most people know very little about. I think we should at least give people the option to buy on an L1 DEX and we’d need some sort of incentives for that.

As long as the mainstream DEXes (Uniswap, Sushiswap, Balancer, Bancor) aren’t on L2 with reliable bridges to Polygon, liquidity will probably remain a problem. We should make it as easy as possible for people to buy and that includes using L1 DEXes. That’s where the majority of all volume is after all. Most people just won’t bother with a project if there are 10 additional steps involved.

According to SimpleAnalytics around 29% of our users are from the United States and 5% from China. This means that at least a third of all Aavegotchi users need reliable DEX liquidity. They can’t use the curve and Binance US is really unrealiable.

Ideas
The first idea that comes to mind is rewarding Uniswap LPs with FRENS. There’s just one (rather big) problem: FRENS on Mainnet are worthless, we’d need them on Polygon. Since they aren’t actually tokens, it’s also not possible to migrate them like GHST. The only thing I can think of to make this possible would be to take snapshots of Uniswap LPs in a predefined interval, to then “airdrop” them FRENS on Polygon. Since I’m not a dev we’d need some input by @coderdan et al.

Another idea would be to create a GHST pool on Bancor to incentivize LPing without Impermanent Loss (IL). Since this would involve a lot of steps and possibly even an investment by the AavegotchiDAO / Treasury, I’ll just link to the older post about this.

Now what?
I would really appreciate some other ideas to incentivize LPing on Mainnet / Uniswap, since I can’t think of anything else at the moment. Feel free to also tell me if you’re not really concerned about Mainnet liquidity at all.

Should we reward Mainnet LPs?
  • Yes, FRENS for Uniswap LPs (if it’s technically feasible)
  • Yes, but something else (please comment)
  • No, Polygon liquidity is enough

0 voters

4 Likes
2

I think I need help in understanding for the Uniswap pool is important. Most of the GHST activity is in Polygon and people (like me) usually swap via Quickswap in order to buy sth. If in Uniswap it is just sitting there and it is relatively expensive to swap too.
Why don’t we incentivise the Quickswap liquidity instead ?

1 Like
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The Quickswap pool already has an incentive program. If you click the “More in-depth explanation” button you’ll find my (longer) argument for Mainnet incentives.

4

Ad hoc I am opting for „No, Polygon liquidity is enough“.

The reason is, it is the easiest solution.

I do not see an urgency to incentivize the L1-GHST pool, but rather – much, much more – the Quickswap-Pool:

whats good for QUICK is good for GHST and (maybe even more) vice versa - thats how I see it.

If I were a whale, and even if the L1-pool would by 1m, I would opt for the L2-pool.

Furthermore I surely would wait for V3 before making a move on L1.

The only reason I can think of for wanting to have a big L1-pool is arbitrage:

if I had the funds, I would surely love to play the L1-L2-arbitrage-game.

But there is one pool I would instantly commit to on L1:

a GHST-uGtochi-pool!

Whale or not: as a holder of GHST and Gotchis, a GHST-uGotchi-pool could give me some hedging-opportunities. But I guess as of now it would be a bit early for that. And as of now, I am not sure, if such a pool would not also have some caveats for our Gotchi-economy: when and how would it increase/decrease volatility?

But I could imagine, that as a big uGotchi-holder I probably would cherrish to have a currency with a bonding-curve to trade against. Provided there would be enough liquidity, trading that pair could be useful and super-fun. Maybe somthing like that could be an incentive for a liquidity-provider?

Overall, thanks fo the pointing the thing out! I am convinced that togehter thinking about liquidity and L1-L2-interaction will open up economic avnenues not yet seen – and Aavegotchi could make yet another front-run :slight_smile:

2 Likes
5

Of course the people who already use Polygon don’t have to care about Mainnet liquidity. But what about new potential players who just want to dip their toes into GHST? It’s impossible to buy on Ethereum mainnet right now, without doing KYC anywhere. Waiting for v3 might be a good idea though.

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It is relatively easy to bridge ETH to Polygon and then use those ETH to buy GHST. That’s how I got onboard. Also ETH transfers are the cheapest to execute, so we can def encourage newcomers to do this.

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7

anything we can do to invite and convert new frens is a “hell yes” in my book

It took me a period of “dipping my toes” before deciding to send numerous chunks of both Weth and GHST. Doing anything we can to keep fees and slippage down at the first entrance is a big plus, offering them frens is a nice way to get them to at least do some research as to how to redeem in the raffles. Love this idea

1 Like
8

Quoting dan’s answer on Discord:

it’s possible but would be quite difficult/annoying to implement
if it was like a once-a-month drop of FRENS that could maybe be do-able

So we’ll probably need a different idea…

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9

i’ve found almost every coin is cheaper then eth bridging to matic. USDC has become my favorite

10

What about using treasury GHST to run a a liquidity campaign somewhere like 1inch, BAO or Sushi?

2 Likes
11

Yeah I guess that would also be an option. I just don’t really like giving out GHST to LPs because it would create selling pressure and would have to be replaced by a different system at some point (when the Treasury runs out of money).

12

Sushiswap has changed their UI yet again, and I have no idea where to find anything, but I assume their Onsen rewards are still a thing…I don’t know how easy (or expensive?) it is to be approved for an Onsen pool in Sushiswap, but that might be one of the least complicated ways to encourage L1 liquidity. For anyone who isn’t familiar, the Onsen pools on Sushiswap are liquidity pools incentivized with SUSHI rewards, often intended to bootstrap liquidity if I understand correctly. Not too different from how Quickswap is incentivizing GHST liquidity, but Onsens seem to be a more generalized approach. Maybe the team could reach out to the Sushi team about establishing an Onsen pool for GHST-WETH?

3 Likes